Consequences of Cultural Practices for Entrepreneurial Behaviors

Abstract

Although national culture is an important regulator of entrepreneurship, there is a dearth of studies that (i) explore the effects of national cultural practices on entrepreneurial behaviors by individuals; (ii) use appropriate multi-level research designs; (iii) consider the effects of culture on different entrepreneurial behaviors such as entry and post-entry growth aspirations. We combined Global Entrepreneurship Monitor (GEM) and Global Leadership and Organizational Behavior Effectiveness (GLOBE) data from 42 countries for 2005-2008 to address these gaps using a multi-level design. We found societal institutional collectivism practices negatively associated with entrepreneurial entry but positively associated with entrepreneurial growth aspirations. Uncertainty avoidance practices were negatively associated with entry but not with growth aspirations, while performance orientation practices were positively associated with entry. Our analysis highlights the differential effects of cultural practices on entrepreneurial entry and growth aspirations and demonstrates the value of multi-level techniques in analyzing the effect of culture on entrepreneurship.

Keywords: culture, entrepreneurship, social institutional collectivism, multi-level, global entrepreneurship monitor, gem

JEL Classification: M13